When to Use a Public Adjuster to File a Commercial Insurance Claim

By Jacquelyn Lynn

When you buy insurance, the claims process sounds so simple: you suffer a loss, you file a claim, you get your money. The reality can often be more complicated, and it may be to your advantage to hire someone familiar with the claims process to help you--and that someone would be a public adjuster.

By definition, a public adjuster is a representative for the policyholder who interacts with the insurance company and assists the policyholder in presenting their claim for insurance benefits. Because claims for business losses are often complex, in many cases, entrepreneurs may find it worthwhile to delegate the task of handling them to someone who specializes in providing such a service. Most business owners and even managers find that their time is better spent on revenue-generating activities rather than navigating the unfamiliar waters of an insurance claim.

If you decide to retain a public adjuster, it's important to have the right one--one who is experienced with commercial claims, who has handled claims similar to yours, and who has a reputation for honesty and integrity. Be wary of an adjuster who promises more than you are entitled to--word gets around and insurance companies know who those adjusters are. The insurer's adjuster will likely scrutinize the work of a questionable public adjuster more closely, and an inflated claim could lead to charges of insurance fraud.

Public adjusters are listed in the yellow pages under "adjusters," but your best bet for finding one is through referrals. Ask the insurance company's adjuster who they like to work with. Most company claims adjusters appreciate working with a reputable public adjuster because it makes the process easier for them. Also ask other business owners for recommendations. Find out how long the adjuster has been in the business, what their insurance claims handling background is (you want one with substantial claims experience from both the insurance company side and the policyholder side), get and check references. Fees are negotiable, and typically based on the amount recovered. They range from 8 to 15 percent, with most being in the 10 to 12 percent range. Most business owners who have used a public adjuster say the fee is well worth it and is ultimately less than what it would cost to have done the job internally.

Finally, once you've hired an adjuster, don't totally abdicate responsibility for the claim. Insist that the adjuster provide you with regular status reports and copies of correspondence, and consults with you as significant events occur.

Do you always need a public adjuster? No. If the claim is simple and straightforward, you'll save money by handling it yourself.

Jacquelyn Lynn is the editor of Flashpoints newsletter. Flashpoints is a comprehensive information resource for business owners and managers who want to take their operation to the Flashpoint. Visit http://www.theflashpoints.com to sign up for a free subscription to Flashpoints newsletter plus an extra free gift: The Mindset of High Achievers by JK Harris and Jacquelyn Lynn.

In addition, Jacquelyn Lynn is the author of more than 20 books, including Entrepreneur's Almanac; Online Shopper's Survival Guide; Make Big Profits on eBay (with Charlene Davis); In Search of the Five-Cent Nickel (with Don Abbott); and 11 titles in Entrepreneur Media's StartUp Guide series. She is working on a new e-book about business insurance. Visit http://www.jacquelynlynn.com for more details and to sign up for e-mail alerts.